For the Rich Results are Bah Humbug

New Orleans I was fascinated by an article in today’s Times about something called Charity Navigator, which would like to influence the way donors give by herding them into a “financial” or “strictly business” evaluation process. The piece was about their attempt to retool “…to add evaluations of a nonprofit’s accountability and transparency to its ratings, as well as research on its impact….” Wow, even adding some sense of “impact,” how revolutionary is that?

Turns out donors don’t much care for the ratings and really don’t care much for anyone’s ideas about how they should spend their money except themselves. What is most amazing is that this golden nugget is being presented as news. Unbelievable! To think that the rich mainly donate to and with people they know and based on what they think they already know, would seem to simply confirm what everyone everywhere already knew about the rich, including folks who direct nonprofits.

A survey was cited by Hope Consulting that only 35% of donors research their gifts prior to making it and only about 10% use ratings services of any kind as a primary source of information. Not trusting the reporter, I went to the survey and its recommendations to see what else these Hope folks might have learned.

The survey by the Hope folks was directed towards an outcome of pushing donors towards different behavior in their making their contributions and trying to understand how the pool of donors might be expanded and made more effective. Reading the executive summary, it was clear that the Hope folks were disconcerted at the results and trying to shine a dirty penny.

Nonetheless some of it was interesting:

Donors want small ball ($25000 or less) and would like it packaged as an investment as well as a gift.

Donors “discover and transact through advisors,” i.e. people they know and trust (certainly not ratings tools and surveys)

Donors are loyalty to the nonprofits where they contribute, and once in they stay in and increase contributions, i.e. if you make a friend, keep ‘em!

Donors say they care about performance, but that is not what drives their contributions, furthermore they evaluate performance based on information they received from the nonprofit to whom they donated, i.e. it’s a perfect circle with the rich, if you can break into the circle.

All that sounds right to anyone who has ever had to raise money and lots of it to keep the trains moving. The notion that a “business model” and more “market efficiency” could be overlaid on donors, especially the really rich seems absurd, since it so clearly confronts the very sense of arrogance and entitlement that becomes part of the “noblesse” way before the “oblige.”

The sense of disappointment as theory crashed into facts was especially palpable in one area. The survey found that bigger and richer donors are not that different than small donors in the way they make decisions about gifts, which surprised some because they wanted to believe in the bias that the richer you were, the smarter you were, therefore the more likely you would be to make decisions about philanthropy in a more “business-like” manner. Poppycock, it seems. I would love to really meet someone who was surprised at this. Where do they live? Who do they know? What is their country?

A better clue to these ironies than the Hope consultants produced or the philanthropic reporter was found in an ironic castaway comment by the Times columnist Bob Herbert in his column about the “Class War” (his words) and the mounting divide between rich and poor now being exacerbated in this Great Recession. As a key example of “rich-think,” he cited the obvious paradox in the appointment by billionaire Mayor Bloomberg of the millionaire CEO Cathleen Black to run the NYC schools. After citing the different world of Black and the private school background of her children and the $4 million 2nd home, he says: “So here we have the billionaire and the millionaire telling the poor and the struggling – the little people – that they will just have to make do with less. You can almost feel the bitterness rising.”

Whatever the world is coming to, as at least Bob Herbert and most of the rest of us realize, it is not moving to a system where the rich are moved anywhere by ratings about anything, especially their alms to the poor and nonprofits, if they give any at all.